Does Lowering the Corporate Income Tax Rate Create Jobs?

"[A]dopting the tax reforms Governor Johnson advocates will literally create millions of jobs. While most politicians, Democrats and Republicans alike, suggest that modest reductions in business taxes might create jobs, Gary Johnson believes eliminating income taxes on businesses will transform the U.S. into the 'job magnet' of the world. Why would any corporation move its operations off-shore when the best tax 'haven' on the planet is right here at home?"

"Lower the corporate tax rate to 15% to unleash American ingenuity here at home and make us more globally competitive. This tax cut puts our rate 10 percentage points below China and 20 points below our current burdensome rate that pushes companies and jobs offshore."

"One of the best ways to drive jobs and improve our nation's competitiveness is to invest in infrastructure and scientific research. Hillary has called for a national infrastructure bank that would leverage public and private funds to invest in projects across the country. She will call for reform that closes corporate tax loopholes and drives investment here, in the U.S."

"We want to directly create jobs, not simply provide tax breaks for corporations or tax breaks for the job creators to move their jobs to China or India. The Green New Deal will create 25 million jobs, including a spectrum of jobs in the green sector, as well as jobs that meet our social needs, and these are public services and public works, like during the New Deal that got us out of the Depression."

"The U.S. has the highest statutory corporate tax rate in the developed world. The tax rate is 60 percent higher than China’s top rate. This high statutory rate discourages foreign investment in the US And the huge number of special preferences and loopholes means the corporate tax code not only harms economic activity, but also collects much less revenue than advertised... As other nations have reformed their corporate taxes, the United States has become even less competitive. We now regularly see US firms re-domiciling their businesses outside of the US, including the large number of so-called corporate inversions…

Jeb’s tax reform plan [would]...

Lower our corporate tax rate to 20 percent – below China’s – to bring jobs and manufacturing back to the United States."

"Our corporate tax rate is one of the highest in the world. The only country with a high corporate tax rate like ours is Japan, which just so happens to also be the only country with a greater debt-to-GDP ratio than we have. Is that coincidence or evidence of cause and effect? I suspect the latter. By being shortsighted and greedy, our government is driving businesses to other countries, which deprives out people not only of jobs, but our government of vital income. If a low proportional tax rate is applied to everyone, including corporate entities, the flow of jobs and income would be into our nation rather than out of our nation. This is not complex economic theory, but rather common sense."

Source: Ben Carson, America the Beautiful: Rediscovering What Made This Nation Great, 2011

"[Ted Cruz's tax plan] repeals the corporate income tax, with the highest top rate among developed nations, and stops driving jobs and business overseas. By replacing the corporate income tax with a Business Flat Tax, jobs and growth will return to American soil, and a chronic source of temptation to tinker with the tax code through corporate loopholes will be eliminated…

The corporate income tax – the source of endless waste and fraud in our tax system – will be eliminated. No longer will American businesses face the highest top tax rate, 35 percent, in the developed world. The trend of American companies and jobs moving off-shore will stop. Instead, all companies will pay a simple, low rate Business Flat Tax of 16 percent. The tax will be based on revenues minus expenses such as equipment, computers, and other business investments."

"[W]e would cut the current 35% corporate tax rate to make it competitive in the global economy. The exact rate will be determined as we continue to shape the legislation, but it must be low enough to end the problem of corporate inversions and the loss of American jobs to other nations. We will also allow companies large and small to deduct their expenses and capital investments while integrating all forms of business taxation into a consolidated, single-layer tax...

In sum, our proposal would make it easier for Americans to find jobs and easier for businesses to create them."

"At a time when we have a $18.2 trillion national debt and an unsustainable federal deficit; at a time when many of the largest corporations in America are paying no federal income taxes; and at a time when corporate profits are at an all-time high, it is past time for corporate America to pay their fair share in taxes so that we can create the millions of jobs this country needs."

"Governor Christie will also lower the Corporate Tax Rate to a more competitive 25% which S&P has suggested could help create as many as 10 million jobs, and allow companies a one-time opportunity to repatriate over two trillion dollars of profits currently sitting overseas at a much lower tax rate which would unleash a wave of new capital investment."

[Editor's Note: Graham co-sponsored S.1921 ("A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and replacing such taxes with a national sales tax and a business tax") on Oct. 26, 2005, which would have repealed the corporate income tax and replaced it with an 8.4% business tax. The bill failed in the Senate.]

"The US corporate income tax rate is among the highest in the world. Countries like Spain, the United Kingdom, and Switzerland have tax rates at 30 percent or less – and one of our largest international competitors, China, has a corporate tax rate of just 25. Even our closest neighbor, Canada, is outcompeting us with a tax rate of only 15 percent. We need to allow U.S. business to better compete internationally, and reducing the corporate rate from the current 35 percent to a low rate of five percent for businesses in economically depressed areas will allow those businesses to expand and compete globally."